KR Choksey has given Buy recommendation for ICICI Prudential Life Insurance with a target price of Rs. 772 in its research report issued on Jan 20, 2022

KR Choksey’s research report on ICICI Prudential Life Insurance

The GWP saw muted growth of 2.1% YoY in Q3FY22. NBP grew 12.3% YoY in Q3FY22. New Business Premium grew by 29.7% YoY to INR 102.48 bn in 9MFY22. APE for Q3FY22 stood at INR 19,290 Mn, an increase of 15.5% YoY. For 9MFY22, APE stood at INR 51.25 bn, a growth of 29.6% YoY. The VNB for 9MFY22 grew by 34.8% YoY to INR 13.88 bn. The VNB margin for 9MFY22 stood at 27.1%, up from 25.1% for FY21. In Q3FY22, VNB margins stood at 26.7% vs 25.7% in Q3FY21. The solvency ratio was 202% against the regulatory requirement of 150%. The total assets under management of the Company were INR 2,375.60 bn on December 31, 2021, which makes it one of the largest fund managers in India.

Outlook

We assign a 2.5x P/EV on FY24E EVPS of INR 304.2 and a VNB multiple of 27.8x to arrive at a weighted average Target Price (unchanged) of INR 772 per share (50:50 weights on the P/EV and appraisal value methodology); indicating a 34.4% upside from the CMP. Accordingly, we re-iterate our “BUY” rating on the shares of ICICI Prudential Life Insurance Ltd.

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